Gold and Silver Fun and Games

234
Wed, May 23, 2012 - 4:00pm

This is just getting to be far too predictable.

Let's see, first it was the April12 gold. Then it was the May12 silver. Today it was the June12 gold. What do I mean? Today was, once again, one day prior to option expiration and today, once again, we get a round trip in the metal as the poor losers who are left trading and hedging get their arses handed to them by the controlling powers of The Cartel.

As a refresher, what we saw in March and April, we saw again today. Namely, the handful of poor saps who had sold put options on the front month, thinking they had free money (Wouldn't you have thought that selling the June 1550 put looked like a safe bet back in February? Heck, maybe even late last week?) Lo and behold late yesterday, with just two days left before expiration, gold gets smoked on the Globex and is driven below its 10-day MA. WOPR selling ensues and before you know it, gold is near 1550 and headed lower. YOU, the poor sap that is short 100 June puts, have no other option but to sell short 100 June12 contracts, just to hedge yourself. Your selling (and everyone else caught in the same vise) sends gold even lower, toward 1535. All of this selling is gladly soaked up by The Cartel until...snap, boom, bang...they spring the latch on the trap and begin rallying gold back higher. Your new short hedge is suddenly squeezed and you eventually cover. This is particularly likely once price rallies back through and above that personally dangerous 1550 level. With gold back at 1560, you are now left with your original 100 naked puts that will expire worthless at 1:30 tomorrow as scheduled, however, you were just lightened of some considerable funds by the coercive, manipulative power of The Gold Cartel. Wash, rinse and repeat next month in July silver if prices continue down at these levels.

The selling of yesterday and today has established the basing/trading ranges that we began to discuss here yesterday. See this for a refresher: https://www.tfmetalsreport.com/blog/3818/not-so-happy-tuesday Of that post, this line in particular is the most relevant:

"Now, please don't misunderstand what I'm telling you here. I'm still extremely excited about where the metals are headed, particularly silver. The ranges I've described above are for the short term, maybe the next week or two and into early June."

Here are your charts that show these new ranges:

Here are some other nuggets that I've picked up as I've gone through the day. First, Jesse had this little ditty about KosherDakota who, as you know, is one my favorite Fed douchebags. This guy is a complete clown. Anyway, the speech Jesse references is not the first time KD has muttered this current bit of nonsense. I actually saw a headline on ZH about a week ago where this buffoon said the same thing that he said today. I was going to write about it at the time but by the time I doubled back to C&P it, the ticker had moved on. At any rate, enjoy the nonsense. https://jessescrossroadscafe.blogspot.com/2012/05/feds-kocherlakota-i-reject-your-reality.html

Trader Dan has a good comment today on commodities, in general. He also made an appearance on KWN. I highly recommend both: https://www.traderdannorcini.blogspot.com/2012/05/continuous-commodity-index-fed.html & https://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/23_Norcini_-_Central_Bank_Gold_Buyers_Battling_Hedge_Funds_Today.html

If you haven't yet, you should speed through this. I often listen to Coast-to-Coast as I'm shuttling LT#1 back and forth to ballet class. I caught part of this episode the other night. The stuff with Peter Schiff is definitely pertinent and well worth your time.

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And this is interesting. With the FB/silver spread now at just $4 or so, can the closure of the latest Hat Contest be very far away? https://www.marketwatch.com/story/how-facebook-could-destroy-the-us-economy-2012-05-22?pagenumber=1

Have a great evening! TF

About the Author

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  234 Comments

May 23, 2012 - 6:44pm

printmoney

I do feel lucky - and apparently we are the 9th happiest people in the world. Ignorance being bliss, this is not necessarily good news.

SRSrocco
May 23, 2012 - 6:47pm

REPLY & COMMENTS...

Beez & Physical_Only... thanks for the comments. You know it is quite interesting when we consider that gold was heading towards $1900 in SEPT and silver $45 right after the downgrade of U.S. DEBT. But all of a sudden and out of the BLUE, both gold and silver got hammered. Some say that gold was heading in a PARABOLIC MOVE. Well that may be true if we live in a VACUUM, but we must not forget, our DEBT PAPER is really worthless. If the truth had gotten out and the world realized it.. GOLD would have moved up to $3,000 within a few days.

Here is JIM WILLIE's chart from his article today:

The huge increase in INTEREST RATE SWAPS is why I believe GOLD and SILVER had to be severely CAPPED. If you look at silver below, you will notice that the ACCUM-DIST de-coupled in SEPT 2011.... a month after the US downgrade.

All I can say... it is going to be interesting to witness the last greatest bubble to burst -- the US Treasury Bubble.

Desert Fox
May 23, 2012 - 6:52pm

Cricket, Cricket

So this young kat goes to pay off his student loans in cash. {100k+}

Thought it would be funny. Nobody at the bank was laughing and evidently there wasn't much silence.

What the hell do the white shoes want from us? {besides compliance}

https://www.dailyfinance.com/2012/05/23/what-happened-when-alex-kenjeev-...

pourty
May 23, 2012 - 6:58pm

@Desert Fox Re: Crickets

Should have used pennies... LOL! (just kidding, but I would love to go to the bank and pay off my mortgage someday with small bills... )

Save_America1st
May 23, 2012 - 7:27pm

Dollar bills are garbage...according to the Cleveland police

I tend to agree, so I'll keep trading those Benny Bucks in for silver (REAL money) for as long as I can!

Man Ticketed for Dropping "Money" on the Ground

CLEVELAND — A random act of kindness lands a man in trouble with police.

Last Monday, May 14th John Davis was exiting I-90 at the West 117th ramp when he saw a man in a wheelchair. The man was pale, thin and holding a sign that had a religious sentiment and also a request for help.

John thought to himself, “I think we’re all to help the less fortunate.”

The middle class family man from Elyria works hard for a living and enjoys giving back especially to people who are physically challenged.

“I have a brother that’s paralyzed,” said John, “My brother’s in that same situation and struggles.”

John reached into his wallet and grabbed a couple of bucks to give to the man. As he approached the light at the exit, he rolled the money up vertically and stretched his arm out of his window. He says, the man touched the cash and one of the dollars fell to the ground.

The man then bent over and picked it up.

Moments later as John travelled North on West 117th he says a Cleveland police officer pulled him over.

“He proceeds to tell me he’s pulling me over for littering,” said John.

Rest of the story and video interview of the victim at the link: https://fox8.com/2012/05/22/man-ticketed-for-dropping-money-on-the-ground/

[Moderator note: PLEASE try to take care not to copy & paste entire articles]

exiledbear
May 23, 2012 - 7:39pm

We are at the singularity in the markets anyway

All the old cycles - throw them away. Everything from here on out will fluctuate at greater intensity and at more frequent intervals.

At least until it all shakes itself apart.

Look, just hold on. Hold. On.

JimmyTheHand
May 23, 2012 - 7:56pm

Damn Fine Post

Damn fine post Turd! I am going to send that over to some of my family members that just haven't quite "Got It" yet. That should help open their eyes, seeing through the eyes of a trader.

Titus Andronicus
May 23, 2012 - 8:12pm

Found a way to create more Turd file space: resize!

I found a way to clear things out for new space: resize your old pictures. You can make them smaller, or nearly delete them by resizing to 1 x 1 or 2 x 1. (I think you need to make sure you uncheck the "Create a new image" box).

Doesn't delete, but you can reduces old files to a very small size. (Remember that monster file you uploaded that takes a huge part of your file space?)

You can use this to make room for more files.

¤
May 23, 2012 - 8:21pm

Freak of the World ~Trying to pick the...

...Bottom

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Puddle of Mudd Freak Of The World
¤
May 23, 2012 - 8:23pm

A brief musical interlude

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